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September is packed with plenty of surprises that could shake up markets

The relatively quiet markets of summer are about to get a wakeup call.

July and August have been mostly good for stocks and bonds with the S&P 500 hitting new highs and rising 9 percent above its late June low. Bond prices have held at rich levels, as yields stayed super low. But that could all be about to change when markets enter September — a month that will be big with central bank meetings and other events that could challenge expectations.

"I think it's potentially a turning point for volatility. Volatility was very low over the course of the summer," said Jeff Kleintop, chief global investment strategist at Charles Schwab.

It is also a time when markets could start to focus on the presidential election, and if Republican Donald Trump gains momentum, analysts expect volatility. The first debate between Trump and Democrat Hillary Clinton is on Sept. 26. Oil could also be a big story for September, with OPEC and non-OPEC members meeting in Algeria at the end of the month.

September is a month that will put the course of central bank easing to the test with the Fed meeting Sept. 20 and 21, the same days the Bank of Japan meets. The BOJ is expected to unveil a review of its own extreme negative interest rate policies. The Fed is not expected to raise rates that at that meeting, but market odds have been rising to as high as 40 percent that it could, after comments from Fed officials at their Jackson Hole, Wyoming symposium last week.

That means the August employment report on Friday could provide a pre-Labor Day surprise for markets, since the data carry the most weight for the Fed's decision and market expectations about the Fed. While economists are still leaning toward December for the next rate hike, they note the chances are higher for September should the jobs report come in much better than the expected 180,000 nonfarm payrolls.

"After Labor Day, a lot of people better come into work ready. It's been almost too sleepy a summer," said Sameer Samana, global quantitative analyst at Wells Fargo Investment Institute. "It's probably about time we all sharpen our pencils a bit and look at all the things that happened over the last three months. They're all events that have long term implications, but very few short-term implications. It was easy to dismiss them out of hand."

"On Tuesday, you'll start to see how the real money views, not only the payrolls report, but I would throw in Jackson Hole and Brexit," said Samana.

Brexit, or the U.K.'s vote June 23 to leave the European Union, ripped markets briefly, before investors adjusted to the idea that it would not be an immediate split. The Bank of England has promised more easing, and its Sept. 15 meeting is being watched for a possible rate cut. The European Central Bank was also expected to keep an easy hand on the tiller, and when it meets in the coming week, it could detail what other type of assets it will buy.

The central bank meetings are important since it...